Bootstrapped TheAgrihub shows online platform for farming can be profitable
Having been in the international agribusiness for 22 years, Rajeeb Kumar Roy travelled across 30 countries for exhibitions, conferences, and business. Despite that experience, he sometimes found it hard to buy basic fertilizers and pesticides for his home garden in Bengaluru.
What he also realised was that discovering new products and technologies for traders, retailers, and farmers can be a herculean task in the scattered cyberspace.
Last year, Rajeeb wanted to source products useful for organic farming and integrated pest management for his existing agribusiness in Bengaluru. When he travelled to Shanghai for an exhibition, one product from a Korean supplier stood out, which Rajeeb wanted to import and distribute in India. While doing some research on it, he stumbled upon something incredible.
He found that the product with the same quality was available in Peenya, Bengaluru, which is 40km away from where he lives. This pushed him to think about a platform to bring all the stakeholders of the farming community in one place. In June this year, Rajeeb launched TheAgrihub (owned by Agrismart International Pvt. Ltd) along with Abhishek Bhatt and Sidharth Kumar.
TheAgrihub is an agriculture-specific online discovery platform that addresses the needs of agribusinesses and farmers across the globe.
“Finding the information about products, its availability, its suppliers, new technology in India and abroad is a big problem. We are trying to solve this problem for B2B companies and farmers so that they can take informed business and purchase decisions to increase profits,” says Rajeeb , an alumnus of IIM, Bangalore.
Rajeeb has been an entrepreneur and in the field of protected farming in India for almost 20 years. Before TheAgrihub, he was Managing Editor of Agriplast Protected Cultivation Private Limited, and CEO of Agriplast Tech India.
Abhishek was the co-founder of Bykr and Agriplast. He did mechanical engineering from Gla Institute of Technology & Management. Sidharth was Head of Finance and Strategy in Bykr and he did his Master's in international business from Grenoble School of Management.
A personal capital of Rs 50 lakh has been infused into the firm so far. Since the concept of TheAgrihub is very new, convincing suppliers to come on board was one of the biggest challenges. It took some time to make them understand how the platform could generate business for them.
Rajeeb claims TheAgrihub acts as the Google of agriculture now. It sources products for the farmers, serves as a product and net technology discovery for the agribusiness owners, and showcases products and technology by the brands.
“So technically this is the complete horticulture and floriculture category. Farmers through our services can find the best of the technology with suppliers and approach the vendor directly. For the suppliers, we offer one platform to reach their target customers. We have a segregated database of farmers for targeting right farmers for right products,” says Rajeeb.
How to generate money?
The platform is currently free for farmers and buyers, while suppliers are charged a yearly subscription fee. The membership plan starts with Rs 18000 and it goes till Rs 3.5 lakh. "We do the customised marketing of companies in our network of 3.5 lakh farmers. We select the supplier seeing their track record," says Abhishek.
He explains that they acquired suppliers by showcasing their products in exhibitions and conferences. However, 15 percent of the suppliers come directly by going through the website of TheAgrihub. Suppliers earn in volumes and gain seven to 35 percent of margin after discounts on the various categories of products.
Recently, it has launched a supplier panel which is a DIY platform where suppliers can directly upload the products and showcase to the farmers. Suppliers can add or remove any of the product at any time when they want from the platform.
Bhavin Thakkar, a supplier and MD, Sonite Corporation, Bengaluru, says, "I have taken a paid membership of Theagrihub and seen atleast order conversion of Rs 13 lakh in the last two months. One thing I have realised in this process is that the customers who come to us through the platform are easy to convert. They are already educated about the product through the website so it takes less time for us to convert them."
TheAgrihub receives 2,500-3,000 queries for products from farmers across the country. Within one month, the startup will launch TheAgrihubsure.com, where it will procure the products from suppliers and deliver it to the farmers. For this, it has tied up with third party logistic firm GATI.
Furthermore, it will launch a call centre to provide assistance to the farmers and help them in the buying decision. To minimise the language barrier, the startup has created a team which interacts with the farmers in Hindi, Telegu, Kannada and Tamil.
Sidharth says, “We are targeting farmers who are little tech-savvy and can use technology to find things of their need. We also have business owners who need to source new product for their distributions. We have plans of setting up a call centre to reach the bottom of the pyramid of the farming community. We have a database of about 3.5 lakh high-tech farmers and soon it will reach one million.”
Market overview and competition
According to a report by the India Brand Equity Foundation, India's foodgrain production has increased marginally to 252.23 million tonnes in the 2015–16 crop year. The GDP of agriculture and allied sectors in India was recorded at $259.23 billion in FY15 as compared to $132.71 in FY14.
The overall growth is attributed to increasing private participation, growing organic farming, and technology intervention.
Agri-commerce startup BigHaat empowers farmers by providing them with quality agro inputs and accessories through a marketplace platform. Agri-equipment rental marketplace Ravgo brings access to modern technology for small farmers who cannot afford ownership of expensive machinery.
Jayalaxmi Agrotech’s crop-specific app in both regional languages and English helps farmers minimise crop loss and improve productivity. Farmguru allows farmers to buy curated, genuine, quality seeds, agro-chemicals and organic inputs in the price range of Rs 75,000-85,000.
Based out of Bengaluru and with a team of 25 members, TheAgrihub gets requests from all across the country but is dominant in Maharashtra, Gujarat, Tamil Nadu, Karnataka and Uttar Pradesh.
Growing at a rate of 52 percent month-on-month, TheAgrihub has achieved revenue of Rs 13 lakh so far and plans to on-board 10,000 suppliers, and expects to convert five percent of them into paid members. At present, it has 3,000 suppliers from pan India and 14 of them are paid members.
Going forward, it wants to expand the discovery platform into an e-commerce platform and generate Rs 3 crore in the next one year.